Let’s start with Culture..

The Annual State of Agile Report has discovered the highest-ranked challenges to adopting and scaling Agile continue to be related to organisational culture, alongside getting senior ‘buy-in’. Culture is the result of people’s behaviours within an organisation. The way people think, speak, behave and ultimately ‘get things' done’. It’s one of the most important factors for business survival, growth and success, but it remains poorly understood - particularly when a company is needing to increase business agility.

Throughout this article we will look to explain and answer the following questions:

• What types of behaviours are needed to increase business agility?
• How can organisations and leaders understand the prevailing culture, and the actions they might need to take to have the right culture in place for increasing business agility?
• What must leaders do to increase business agility?
• And, finally, how can new behaviours and emerging cultures evolve?

The Competing Values Framework (CVF)

Before we proceed, any exploration of the impact of culture on agile should probably start with a look at how we assess culture. There are various culture models out there, and the CVF is considered the most effective.

There are two dimensions to the CVF: Stability-Flexibility and Internal-External.

Stability-Flexibility The stability-flexibility dimension covers, on the one hand, those organisations that believe they thrive with high levels of stability and control, and, on the other hand, businesses that believe they are more effective with high levels of flexibility and adaptability.

The former group tends to have clear structures, processes and rules, not to mention lots of up front analysis and planning. They focus on exploiting efficiencies in their existing offerings to see how they can deliver them to customers more cheaply.

The latter group tends to focus on people and outcomes, and can respond to changes with speed. They believe exploring new opportunities and offering new products to customers gives them a competitive edge.

Internal-external The second dimension is Internal-External. Businesses with internal orientation tend to focus on inward coordination and collaboration, whereas, external orientation focuses on the customer, market, competitors and new trends.

The two dimensions mentioned above define the CVF’s four quadrants; Control, Compete, Create and Collaborate, which can be found in the image below.

Let’s be clear: there are no right or wrong cultures. Some cultures may suit and/or be more effective in different domains and industries. In fact, in reality, a healthy business will often have a mix of all four culture types, spanning different areas of the business.

For example, a bank may have a ‘control’ culture within their legal and compliance department but may have a ‘create’ culture in their digital and technology space. Unfortunately, in today’s world, businesses try to have a one-size-fits-all culture which consists of the same values, behaviours, policies and structures across the entire organisation. This tends to result in companies settling for ‘control’ and ‘compete’ (say), but at the expense of innovating new ideas and adapting to changes.

Useful Tip: The CVF has a lightweight assessment tool which allows leaders to understand the current culture across their business and see where they need to improve in either of the four quadrants to reach their desired culture. In the first instance, I’d recommend focussing on understanding the current and desired culture before planning any changes. Choose the right values, behaviours, policies and structures which align closely with the target culture. _

The Agile Manifesto - Values and Principles

Interestingly, if we were to map the four values from the Agile Manifesto (Individuals and Interactions, Customer Collaboration, Working Software and Responding to Change) they would very much sit in the ‘Collaborate’ and “Create’ quadrants. Whereas, we would see the aspects that the manifesto de-emphasises sit in the bottom left in the “Control’ section, namely: Processes and Tools, Contract Negotiation, Comprehensive Documentation and Following a Plan.

For companies to increase their business agility, they must align with ‘Create’ and ‘Collaborate’ cultures which encourage high levels of flexibility and experimentation, along with a strong customer focus.

Leadership - 10 Ways for Leaders to Increase Business Agility

Leadership is the most important element in shifting behaviour and reaching the needed culture for increasing business agility. Leaders must drive the right values, policies and structures. They must also demonstrate the right behaviours and mindsets. Failing to do so, and maintaining continued focus in doing so, stifles business agility.

What must leaders do to increase Business Agility?

1. Envision the desired culture Be clear on the current and target culture of the business, understanding the reasons and benefits behind the shift (the “why”). Focus on choosing and driving the right values, policies and structures. Particular attention should be paid to those which land in the ‘Create’ and ‘Collaborate’ quadrants of the CVF as these allow for better collaboration, greater experimentation, new ideas and fast learning. Leaders should remove any HR policies and rules which are overly controlling and dictatorial as these will not treat people like adults & destroy trust, for example, avoid setting strict working hours. Leadership must be role models who show the behaviours they would like to see to build the desired culture.

2. Communicate an inspiring vision Clearly communicate an inspiring vision and shared goal for teams to target. Leaders need to set the “what” and ensure teams are fully empowered with the “how” regarding fulfilling the set vision. This engenders a culture of autonomy, ownership, accountability and trust. This provides teams with a sense of purpose, greater happiness, and helps teams adapt, deliver and innovate at speed.

3. Track employee engagement Regularly track employee engagement and take actions to continuously improve it over time. Doing so supports employee happiness and engagement level growth - two of the leading indicators of company effectiveness.

4. Decentralise decision-making and build interconnected cross-functional teams Encourage flat hierarchies and decentralised decision-making, with the responsibility being with the teams who are closest to the work and customers. Leaders should continuously look at ways to delegate work safely, ensuring there is a clear goal for the team to work towards. This allows for quicker decisions and shortens the lead time to deliver value to customers. Leaders must also invest in building small networks of interconnected cross-functional teams, with open communication channels, who are customer focused and aligned working towards the same goal as mentioned above. This minimises dependencies and hand-offs, resulting in quicker delivery

5. Remove obstacles for people Support teams and the people doing the work by ensuring people are respected and heard, while removing any obstacles they may face. Leaders must respond and proactively unblock teams to ensure there is the right environment to perform. This helps team members deliver and innovate at speed, and feel more valued, respected and engaged.

6. Foster a culture of respect and psychological safety Foster a culture of respect and psychological safety, the belief that employees won't be punished or humiliated for speaking up or experimenting and failing. This allows for a positive and safe mindset across the business, allowing for better employee wellbeing, collaboration and motivation. Leaders should also share information openly within the organisation, fostering a transparent culture where decisions, challenges, and successes are communicated openly - trust is built through open and honest communication.

7. Spend time with teams and invest in people’s personal development and growth Spend time coaching and mentoring people around you, investing in their personal development and growth. Move away from annual reviews and move towards regular coaching conversations around goals. Provide feedback regularly and in the moment, avoiding any threat response. This allows for better quality and more “fresh in the memory” conversations. It will help enhance people’s engagement and productivity, and also build an environment of psychological safety and trust. Leaders should also spend time and build connections with the teams, where the work happens. There is no better way to understand the culture of the business, the mood of the team and any systematic impediments which make teams less effective. A status report and/or a sprint “demo” will not provide this!

8. Encourage teams to work in a cadence of rapid short work cycles Encourage teams to work in a cadence of rapid short work cycles that continuously receive fast feedback to learn. Allow for innovation and the ability to pivot to accommodate new changes. Look at ways to increase the flow of value to customers. This will help your teams deliver changes more quickly which is rewarding.

9. Ensure there is downtime for teams to come up with new ideas Ensure there is downtime for teams. This provides space for teams to resolve problems, making them more efficient, and more importantly it provides headspace for innovation to percolate and for personal development. New ideas rarely come from people who are always busy!

10. Eliminate Waste Focus on identifying and eliminating ‘waste’, that is, work that doesn’t directly contribute value to the customer. For example, over-investing time on detailed up-front planning and estimation which is prone to inaccuracy. Other wasteful activities could include unnecessary bureaucracy with change management processes or an over-zealous internal audit function.

How can companies (and their leaders) foster new behaviours to create an agile culture?

As mentioned above, it is crucial that leaders act as role models and demonstrate the behaviours they would like to see in others, across the organisation, to shift culture. They must start with small policy changes to incentivise and encourage the desired behaviours. It is also important that leaders show recognition and gratitude when desired new behaviours are observed in teams and individuals.

Leaders must find ways to increase levels of engagement by applying the tips listed above. For example, ensuring teams have a purpose and are empowered to act autonomously, to make their own decisions within guardrails. Organisations must create an environment to foster intrinsic motivation instead of “carrot-and-stick”. To maximise collaboration, leaders should incentivise teams rather than individuals.

Wrapping up

There are various areas which can increase business agility, such as having better ways of working in place or the right technology to be able to deliver changes more quickly and frequently. However, company culture is still the main impediment to success and greater agility.

To increase business agility, organisations must have ‘Create’ and ‘Collaborate’ cultures from the Competing Values Framework (CVF).

The relationship between company culture and leadership are so interconnected. Behaviour and resulting cultures are driven by the leaders. That’s why it is vital that leaders act as role models and show the behaviours they would like to see to shift organisational culture in the right direction.

Closing the series…

This is the final article in our #agilebeyondtech thought leadership series which has offered a broad examination of ‘agile’ across a number of facets, but all rooted in the pursuit for greater business agility.

While the term 'agile' has been with us for many years and is based on a set of seemingly intuitive principles and practices, the reality is that organisations still struggle with adoption, leading to frustration or even abandonment and regression back to ‘traditional’ and more ‘trusted’ ways of working, albeit fraught with their own failings.

Our series began by an exposé of Mindera as a TEAL organisation, explaining how this organisational philosophy has agility baked-in from the ground up. We then delved deep into the subject of agile transformation, covered in two parts of setting the foundations for transformation and then executing change. The fourth article tackled a more technical topic of agility in architecture teams which is frequently misunderstood or disregarded, but at the peril of sacrificing the right long term strategic decisions at the altar of rapid build and release.

As with many things in work and business, so much of agile's success is dependent on buy-in from the highest levels and human behaviour, which is why we felt it fitting to end this series with advice for leaders. No pressure!